The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order of the Commissioner of Income Tax ( appeals ) acknowledging that the non-appearance due to continuation of information gathering process not deliberate act.
The AO, after scrutinizing financial statements, identified discrepancies in disclosed rent information from multiple tenants. calculating income from house property for flat Nos. 401, 501, and 601 at Rs. 10,14,608, and an annual rental value of Rs. 61,980 for a shop. Notably, claimed expenses lacked proper supporting documentation, leading the AO to estimate a 10% disallowance, totaling Rs. 21,380. The AO subsequently assessed the total income at Rs. 35,25,850, issuing the order under section 143(3) of the Income Act 1961, on 14.03.2016.
The counsel for the assesse Pratik Jain contended that the CIT( A ) had erroneously upheld the Assessing Officer’s actions, disregarding the submissions presented during the assessment proceedings. Additionally, the assessee asserted a strong case on merit, pledging to provide substantial evidence. The counsel for the assessee requested an opportunity to clarify the matter before the lower authorities.
The two member bench of the tribunal comprising Pathmavathy ( Account member ) and Pavan Kumar Gadali ( Judicial member ) observed that the CIT( A ) based the decision on the assessee’s non-appearance, despite seeking an adjournment and being provided with ample hearing opportunities. The CIT( A ) concluded that the assessee displayed a lack of interest in pursuing the appeal and subsequently dismissed it based on the existing records.
The grounds of appeal challenged the Assessing Officer’s additions, and various reasons for non-appearance could be considered. Upholding the principles of natural justice, the bench chose to grant the assessee another hearing opportunity.
Consequently, the CIT( A )’s order was set aside, and all contested issues were remitted to the CIT( A ) for a fresh adjudication. The assessee was given a fair chance to present evidence and information, and the appeal’s grounds were allowed for statistical purposes.
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